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If only data can clean itself...

It's important to remember that data is primarily a collection of numbers and figures drawn from actions that people perform online and offline. At its core, data is a symbolic system to understand human behavior, and therefore can be subject to manipulation and misinterpretation. Here are a few characteristics that organizations should remain aware of while using data to drive strategy.

What data can and cannot do

1. Data can't clean itself: One of the worst cases that nonprofits can experience is building fundraising strategies off of dirty or incomplete information. For instance, a lot of times donors or volunteers will enter contact information that is full of inaccuracies, ranging from misspelled street and email addresses to incorrect phone numbers. This kind of data is critical for a fully functional fundraising campaign. For direct marketing appeals, nonprofits depend on clean data to ensure mail goes to the right person or the phone call goes through.

Spreadsheet data is commonly plagued with inaccuracies.

To alleviate this type of issue, there are technical solutions to ensure contact information is accurate. Address verification software, for example, corrects contact data in real time to make certain a direct mail fundraising campaign stays within budget and yields the result that nonprofits are looking for. Accordingly, charitable groups will likely need to turn to software solutions to keep their data clean.

2. Data can't analyze and interpret itself: As previously mentioned, contact information and demographics are figures on a page or in a database, and a clear strategy requires human interpretation through the use of technology. For instance, to perform segmentation of the donor base, nonprofits will likely need to use software to identify commonalities among the audience to create targeted campaigns. There will likely be donors who will give different amounts and with varying frequency. A segmented list will isolate individuals who demonstrate similar behavioral patterns, and nonprofits can adjust their appeals accordingly.

3. Data can highlight trends Take the case of donor retention. According to Business 2 Community, donor retention rates are actually on the rise. Citing research from the Urban Institute and the Association of Fundraising Professionals, B2C explained 43 percent of individuals who donated in 2012 gave again in 2013. That's up 4 percent over the previous years. Nonprofits can use this information not only as a positive signal or as a benchmark, but also to raise the question of what tactics helped boost retention rates. What's more, the longer donors remain active within the fundraising community, the better information a nonprofit will have about its fundraising campaigns.

Data is a unique resource for nonprofits. It can help shed light or cast a shadow. It's up to each organization to realize the best ways to manage it to develop more effective strategies.